Posted
by
timothy
on Friday July 29, 2011 @06:43AM
from the dog-bites-man-over-and-over-and-over dept.

hypnosec writes "A report combined by MPs has claimed the UK government is spending 'obscene' amounts of taxpayers' money on IT. The Public Administration Select Committee revealed in its report that some government departments have spent £3,500 on a single desktop PC, which can be purchased for as little as £200. Some other examples of the government pouring public money down the drain include buying copier paper for £73 when it can be purchased for £8."

The media reporting this story appear to be doing a good job of ignoring what that £3500 PC actually is: three years of PC, with software licensing, hardware replacement, upgrades, maintenance and support. It's not just the bare metal put on someone's desk but the full service behind it.

If you take the IT budget for a large healthcare public sector organisation and divide it by the number of desktop PCs they support, it'll probably come out at around £1000/year.

A fair point, but the fact they were overpaying by a factor of nine for the copier paper too, which I'm assuming didn't come with a support contract or licensing, seems to imply there was still significant waste going on.

My guess is they've got a contract with a printer company that basically gives them the printer, all the paper and the toner they need over the lifetime of the machine and a number to call which will get an engineer out guaranteed in 8 hours, no matter where the printer is in the country. Typically with such contracts you never own the printer - you pay a fixed price per page and when the printer reaches the end of its useful life the printer company will either charge you to dispose of it or give it to you

I consult in this area. I have to tell you that where the NHS and local authorities are concerned, printing is a very competitive business and only efficient suppliers make a go of it. (The contracts you describe are, however, going out of date.)In fact, the worst cost offenders in both areas are not the IT/facilities providers and the supply companies; they are the end users who buy inkjets and run them on petty cash.

My own GP is very clued up in this area and keeps a close watch on the local trust to see if they are getting good value for money. Generally speaking, they do. In fact, compared to privatised healthcare in the US, the NHS is amazingly efficient and low cost - which is why we have very similar life expectancy adjusted for social class, but we only spend half as much of our GDP as does the US - and our GDP per head is lower to begin with.

You don't have doctors in the UK expecting to be millionaires... Your doctors are salaried, pretty well, but not $500/hour

Salaries for family doctors/GPs are pretty comparable - somewhere between $80k and $180k depending on overtime and experience both in the US and the UK (and much more for dentists and senior specialist doctors, of course). The savings in the UK come from the other sources that you mentioned, and in my opinion especially from the NICE guidelines of what drugs or treatments offer bang for the buck -- keeps pharma and equipment firms much more on their toes than the Cadillac plans in the US.

If it helps, my support contract for a number of printers and digital photocopiers is 1p/page, and this includes all toner, paper, less than 12 hour call out, all parts and labour do not cost anything. We do have to pay half the cost of a new printer. We only do about 500 pages a week on all printers.

A fair point, but the fact they were overpaying by a factor of nine for the copier paper too, which I'm assuming didn't come with a support contract or licensing, seems to imply there was still significant waste going on.

That is assuming that it is true. Has anyone been able to find where it mentions copier paper for £73? I did a quick search of the report and found no mention of this example.

I wanted to see just what kind of paper you would get for this much money. A quick search of the net found a real-world example [mayfairstationers.co.uk]. I can't think of a reason why anyone in government would need parchment paper, but was this the kind of thing being purchased? If it was a specialty paper then the comparison to the £8 variety mig

It was probably copier paper that met the government's official standard for what copier paper is and had all the associated documentation signed in triplicate demonstrating that it was in fact government approved copier paper of the correct weight, brightness, texture, and flavor from an approved copier paper vendor who probably spend months or years jumping though hoop to become a certified copier paper vendor (or was related to someone in government).

Meh, it's similar in the US gov't & defense contracting sector, mostly for tax reasons.

For a largish contractor, if a PC is purchased for under $3000-$5000, it comes out of the expense budget, which tends to be relatively low year to year. If it's over that amount, it can come out of the much larger capital budget, which tends to be much bigger, and the company can take tax breaks for depreciation of that equipment over 3-5 years. So to the bean counters, it's much more desirable to have stuff come ou

Healthcare? Profitable? I worked for the National Health Service for four years. It most definitely has its fair share of wastage. But the NHS — being state-owned and state-provided healthcare — is certainly not "profitable"

It's a lot more complicated than that: GP Practices are often private partnership businesses (between a bunch of GPs) and most definitely are run "for profit" in the sense that they have to bid for work from the healthcare commissioners (mostly this used to be the PCTs, now it's mostly the regional StHAs, etc). And the NHS does farm out some work to private hospitals to meet its waiting-list targets (and also under the banner of "Choice" that the Blairite government brought in)......but yes: the vast, vast

... that this £3,500 doesn't just cover "hardware sitting on a person's desk"; it also includes the software, support, long-term upgrade contracts, etc. This "journalism" sells newspapers (unsurprisingly, the Daily Mail featured it quite prominently) but ignores most of the facts.

I'm not denying that some money is being wasted, but nowhere near as much as this report implies. See this article [pcpro.co.uk] for more detail.

The sad truth is the support that comes with most PCs and software is usually under-utilized and seldom needed.

In this case, "support" is likely to be the infrastructure team within the organisation itself who handle the repairs, upgrades, security updates, server maintenance, etc. It's not going to be the telephone helpline that tells you where to plug your mouse into or what your ISPs telephone number is.

The main problem is that, like all the other numbers, the £3,500 figure is unexplained. For all we know, it's "total amount that the IT department spend" divided by "number of users". That would mean it als

The argument can be made that it is much cheaper to buy a $200 PC and throw it in the trash every 3 months than buy a $500 one with "3 year support"

Not really. It would be an IT nightmare to replace a PC every 3 months especially in a large organization. When a machine is replaced you cant just replace the box when it arrives from the manufacture. You need to image the HD to the organizations need which means every 3 months a new image will need to be created, tested, and put into play. Any custom network configuration or software will need to be installed. Any form of data that is stored locally will need to be moved. Users will experience downtime f

The argument can be made that it is much cheaper to buy a $200 PC and throw it in the trash every 3 months than buy a $500 one with "3 year support".

The sad truth is the support that comes with most PCs and software is usually under-utilized and seldom needed.

You still need people to decide at what point the $200 should be thrown away, you still need people to setup and install the new PC, you still need people to temporarily install a PC if any repairs are done, and so on, and so on. It's not like buying a calculator, you can't just leave it up to users to maintain their networked PC.

Desktops are effectively disposable these days. Buy a new one for £200 every year - or just by twice as many as you need and replace the ones that fail over three years and it's still only about £400 for the three years. Long term upgrade contracts? Just buy a new machine when those fail - you can give the old ones to schools that are still using decade old computer labs. Software? Most of these machines are going to be running Windows, Office, and some department-specific custom software.

and what about copies of software? a site wide business license of windows/exchange/office? I'm sure there are some more apps in there as well. Hell AutocadLT is around $400-$600 a seat per year, and you have to buy every year, because someone in the chain will upgrade, and then you can't open the files.

The problem here is that the article is seeking to overspecialization something that that really seems like an issue. For instance, I'm fairly certain you can't get a professional office desktop for 200 pounds in the UK. I know you can't get one here for anything like $350 (which would be the approximate translation), and I doubt the UK is overflowing with excessively cheap hardware. You can get a computer for that, but not one you'd want. We're also given no context. I work for a US government facilit

the summary [parliament.uk] mentions the £3.5k, but with a slightly different context than TFS.

Given the cuts that they are having to make in response to the fiscal deficit it is ridiculous that some departments spend an average of £3,500 on a desktop PC.

is this with or without software? add a Citrix licence, SAP access, some security token with a user licence, MS Office, AD user access licence,... and it is at least thinkable that one workstation is expensive as hell.

Why the F do they need Citrix, EVER? What does Citrix do that couldn't be made simpler, cheaper, faster, more robust, and more secure by just not using Citrix...

That's an extremely good question when you consider that Microsoft Windows Server licensing explicitly says that any form of remote desktop you make available for general purpose use, you buy Terminal Server licenses. Even if you're not actually planning to use Terminal Server to deliver that remote desktop solution, you still buy the licenses.

While I have no doubt that some departments are letting themselves get raked over the coals(or taking kickbacks, better check on that), and that someonebody has been seriously drinking the kool-aid when it comes to the 'efficiency' of contracting everything, I am annoyed by the example being cherry picked:

A £200 computer is, what, the low-end consumer model on the shelf at limey-Best-Buy? Oh, that'll make perfect sense as part of an enterprise IT system, once we've quadrupled the RAM, upgraded the OS to something that will bind to AD, factored in the cost of Office and whatever horrid application specific cruftware holds the department together, and doubled up on screwdriver monkeys because the hardware that gets thrown into that model changes only slightly less often than the serial number does...

As I said further up, the far more damning thing is what they were spending on copy paper - you're quite right to say that many factors influence the total cost of a PC, and while I'm inclined to think they probably were getting ripped off, a comparison to a £200 piece of crap as made in the summary is disingenuous. Plain white office paper is a pretty standard commodity, though, and they were still paying nine times over the odds for it, which doesn't speak too well of their purchasing procedures in

Yeah, I have no doubt that they either can't manage their contractors or that they have an incentive to mismanage them. Getting shafted on commodities is a bad sign.

I think that I'm mostly just annoyed because I had to have the "Yes, there is a reason that isn't 'waste and my incompetence' why a gigabyte of space on the versioned, offsite-replicated, battery-backed, redundant-PSUed, tape-backuped, SAN costs rather more than a gigabyte of space on your USB external hard drive..." chat with somebody the ot

I think that I'm mostly just annoyed because I had to have the "Yes, there is a reason that isn't 'waste and my incompetence' why a gigabyte of space on the versioned, offsite-replicated, battery-backed, redundant-PSUed, tape-backuped, SAN costs rather more than a gigabyte of space on your USB external hard drive..." chat with somebody the other day...

We've all had that conversation. Usually by the time you've explained all the bits that make it ten or fifteen times dearer per gigabyte, they've decided some time ago "I don't understand, and any time someone tries to blind me with science I assume they're ripping me off".

hmm copier paper at a govt place may just be water marked, heavy paper, delivered in armored car and such. I could see how that would cost 73 UK pounds a ream. No where does it say what sort of copier paper it is nor does it mention any of the things that could influence the price of the "computer".

The nice thing about the new wave of those little atom boxes is how homogeneous they are. You pretty much get the intel reference board one, or the Nvidio ion2 one, and that about rounds out the set of variables.

My problem with doing best-buy-best-buys in enterprise settings isn't that The Enterprise Needs Real Serious Workstations(it doesn't, generally); but that you can swiftly end up with a horrible profusion of similar or identically labeled machines with somewhat different hardware inside. At work,

Most submarines don't allow smoking except in certain designated areas where you're unlikely to start a fire. (On the one I visited, the one smoking area was at the very tail end of the ship, after the turbines.)

As a submarine is a workplace for sailors, in the UK the only place you could smoke would be outside.

Let me break it down , there's two possible reasons.One , as other readers have suggested , the article might be purposely omitting various facts or mixing up total cost of ownership with purchase value.Two , it's not that the buyers were stupid , they might be to some extent (not knowing the market well enough to shop around for the best deal) but that doesn't cover such a deep discrepancy.Most often than not , at least in the ex soviet block , these things are done to take money away from the institution

-and it's probably a little of both. It's a shame the newspaper sensationalized the story because they lost credibility for a problem that is nonetheless real, even if badly exaggerated. Tax revenue is like free money to some state workers. I've seen state workers leave their state car running for over 45 minutes while they hobnobbed with a buddy inside an outlying building to the main campus. This happened the last time gas was near $4 USD a gallon.

The MP Geoffrey Bacon has been working on this for years. It is simply untrue that MPs are getting kickbacks as suggested above; UK political corruption is minute compared to US corruption because we don't have budget riders to Bills. And in any case much of our corruption is exported from the United States, isn't it, Rupert, Donald and co.?

The main areas of waste are simply large infrastructure projects that are badly designed by unqualified Civil Servants with unrealistic and underspecified objectives, wh

US politicians are more or less allowed to buy influence and votes by adding riders to Bills which entail spending in their districts. The amounts of money involved are really quite eye-watering. In fact, the use of Government spending for pork barrel is one of the factors in the current standoff - the Republicans are demanding spending cuts for things they don't like while continuing to send pork-barrel bills for approval.

Although the money doesn't go directly to the politicians, some of it often ends up i

I have seen with my own eyes, a government department that uses a company for all their IT needs, and that company needs to fill out a form every time you need to purchase a mouse, those forms and paper trail end up costing about 100$, for an 8$ mouse.....seriously, when no one is watching how you spend the money, anything goes, but tell these same people to pay 100$ for a mouse at home , they would freak!!!

I have seen with my own eyes, a government department that uses a company for all their IT needs, and that company needs to fill out a form every time you need to purchase a mouse, those forms and paper trail end up costing about 100$, for an 8$ mouse.....seriously, when no one is watching how you spend the money, anything goes, but tell these same people to pay 100$ for a mouse at home , they would freak!!!

Sounds like a good excuse to get that $100 ergonomic wireless darkfield laser mouse with the high inertia scroll wheel and adjustable weighting then...

Seriously, I'd guess $50-$100 is not atypical for the amount of money a large organisation spends processing any order. Partly to blame are the reams of tax, accounting and regulatory crap that firms have to deal with. On the other hand: while the adminisphere are quite happy to explain to you why, in these lean times, you can't have a $8 mouse and you'll j

The inevitable review and response to this scare story will produce a series of reforms which will increase these costs by introducing more "accountability" steps that increase the admin overhead. One of the main justifications for these single-supplier procurement deals is that they are necessary to comply with regulations on competitive tendering and other "lets fix everything" laws.

Some plonker comes along and demands to know why IT resources cost so much more than the crap he can buy at Best Buy. If said plonker has any pull at all, everyone gets all worked up for a while and plans are made to pilot a program to just buy all our shit at Best Buy and avoid the costs. Then people start looking at bringing hardware reliability up to corporate standards, retaining extra employees to do away with "expensive" support contracts and licensing software. Then, for some bizarre reason, the project quickly and quietly dies, is buried and no one ever hears about it again. This usually wastes more money than is actually being "wasted" with the "expensive" desktop machines we're using.

I doubt it. Apple is not on the list of approved suppliers for most UK government departments. In a lot Dell is the only option, and their government price list is insane: at least double their web price for exactly the same equipment. Even if this includes a support contract, it would still be cheaper to buy the cheap version and just throw it in the bin and buy a new one if there's a problem. Spending £3500 on an Apple desktop would mean a 12-core 2.66GHz Xeon - I'm pretty sure you can't get that for £200 elsewhere, since it has two CPUs that retail for over £500 each (although the rest of the specs on that machine are pretty anaemic for the price: only 6GB of RAM and a single 1TB disk? WTF Apple?)

iPads are probably not part of the same procurement system. I can think of three ways that they might be purchased:

Employees buy them, and then charge them to expenses if they're using them for work purposes.

They get classed as specialist equipment for a specific project, rather than as computers.

Someone writes a requirement specification with something like the thickness of the iPad as a requirement. The normal suppliers can't meet the requirements, so they are allowed to use an outside source.

I work for an agency here in the states and we are a Dell shop. Dell likes to charge $700 for a system bragging they they gave us a $200 discount on a $900 machine that is actually worth $300. The biggest problem we have in our shop is that we don't have an IT budget. All It procurements are made from the general or individual funds and the IT director just rubber stamps many of them just to keep people happy.
There is a bigger problem though with the industry in general in that IT people are often not

Imagine the horror I was in when I showed up for work to find 30 E-machines with windows Vista home premium on them and was told to connect them to the domain and start replacing the secretarial computers. I guess "a deal" is a deal regardless of how much of a downgrade something might be or extra costs might be associated with making it work.

Yes, I have ran into the same problems with the head of IT not being an IT person. the most painful part of that is that t

I work for a government organization, and we have all Dell workstations. They have special government pricing that allows us to buy without going to tender (tender is basically already done and Dell won the bid for a given time). The price is very good, and their support and warranty has been great. I can't speak for others, but we certainly still use Dell.

However, as our report from the 13 May states:
“The bottom line might make it look like Cabinet Office workers are all sitting in front of the most ridiculously expensive machines in Britain, but officials played down the figures, saying they covered more than just the hardware.
According to a Cabinet Office spokesperson, the “costs cover the core infrastructure and applications – basically anything supplied by a third party’.”

Regretfully having read much of the report, the above is a good example of how worthless it is. PC Pro rubbishes poor media coverage of a government report, then another government report quotes PC Pro and uses the figure in exactly the wrong way that

Sounds about right, similar things happen in the US. When my father in law was in the naval reserve he noticed that there was a specification for ketchup and that when more was received there was associated documentation to ensure that what they actually received was actually ketchup by the official US government specification. I guess some of this has changed in recent years but I gather that a lot of it still happens.

Not at all. They are buying windows PCs from approved suppliers. Getting approved requires an almighty mass of paperwork that would crush any normal company. The only companies that will deal with the UK government are experts at government bureaucracy first and IT suppliers second. They know that once they have made it onto the approved list they have very little competition so can charge well over the odds.

... They know that once they have made it onto the approved list they have very little competition so can charge well over the odds.

Often, once they are on the list there is no competition! I'm not sure what the Approved Supplier List is supposed to do, but it sure as hell doesn't guarantee price or performance! Strikes me it's just a boondoggle to encourage back handers, 'cos there's precious little else to recommend the practice!

If it's really that much work to deal with the paperwork, then I can't even blame them for charging more. Makes sense to have the customer pay for his own silly paperwork, doesn't it? So the real news is that bureaucracy is raising IT costs to an unreasonable degree.

Yes, do so agree, at London borough [district probably in the US] level, perfectly adequate PCs are 'refreshed'/dumped because 'they' don't know how to manage viruses, huge roaming profiles etc. etc. the next-door borough nearly went to Linux and then backed away. Without being an open-source nut, this would certainly be a healthy part of a solution. We already believe in 'mixed' economy don't we, so this isn't much of a reach.

Imagine a pallet of florescent lightbulbs being scrapped. Somehow in accounting they were sent to the wrong facility.

Its logistically cheaper to scrap an entire room than try and salvage anything out of it. I'd dig through the scrap bin and find... you name it.-Although I'd rather waste 3x on the costs of a PC than $0.50 on the costs of killing brown people.